Several types of card payment systems are available, examples of which include credit cards, charge cards and debit cards. In general, transactions involving a card payment are conducted in the currency of the merchant. Thus, if an Irish credit card is used for a purchase in the USA, the currency of the transaction will probably be in US$. The transaction value will subsequently be converted into an equivalent EURO value by the credit card holder's bank but is unknown at the point of sale. This equivalent EURO value will subsequently appear on the credit card holder's statement. This restriction can be inconvenient for cardholders travelling abroad, as they are unsure of the exact value of the transaction in their own currency at the point and time of sale.
Dynamic currency conversion overcomes these limitations by performing the currency conversion at the point of sale at the time the customer makes a purchase using their payment card. An example of a dynamic currency conversion system is described in WO01/0486. With dynamic currency conversion processes, the cardholder is informed at the point of purchase as to what amount they are paying in the cardholder's own currency, whilst the merchant obtains payment in the merchant's own currency. This process is possible because the function of converting from the currency of the merchant to the currency of the cardholder is performed at the point of sale terminal rather than in the computer systems of the bank in which the cardholder has their credit card account. In the context of the present application, the term bank refers generally to any financial institution, which offers payment card services and may be taken to include, for example, building societies and credit unions.
In addition to dynamic currency conversion schemes, multi currency schemes also operate to perform the currency conversion part of the transaction prior to submitting the transaction records to the banks for processing. However, in a multi currency scheme the conversion process does not necessarily take place at the point or time of sale but is converted subsequently.
Payment card transactions are processed and submitted from the merchants to the financial institutions, or an intermediary, as transaction records. Each transaction has an associated transaction record, containing the details of the transaction. Before the introduction of dynamic currency conversion in payment card transactions, an extract of a transaction record would have looked something along the lines of the transaction “A0” shown in FIG. 1.
The precise fields and formats of fields used may vary from bank to bank. In brief, the data in the fields identifies the date of the transaction, the name of the holder of the payment card, the card number of the payment card, the expiry date of the payment card, the name of the merchant who is performing the transaction, the code of the merchant performing the transaction and the amount of the transaction.
With the introduction of dynamic currency conversion transactions, a number of additional fields are required to be “captured”. An extract of an exemplary transaction record in a dynamic currency conversion environment is shown in the transaction “B0” in FIG. 2. The additional fields to be captured comprise the converted currency element of the transaction, which may include the converted amount in the currency of the cardholder's payment card account, which the cardholder will see on their statement and the exchange rate used to perform the conversion. The currency of the cardholder may also be required.
Normal transactions (transactions processed in the currency of the merchant only, an example of which is shown in FIG. 1) are processed conventionally typically through the acquiring bank of the merchant, whereas the dynamic currency conversion transactions may be separated from the normal transactions and may be routed to a dynamic currency conversion system, which may be separate from the acquiring bank, for transmission into the card schemes and which may be settled back to the acquiring bank and/or the merchant via a multi-currency payment card processing bank or other route. A multi-currency payment card processing bank is a bank which is capable of processing payment card transactions from merchants in more than one currency. The separation function may be handled by a POS device dispatching normal and/or converted transactions to a first host and normal and/or converted transactions to another host or hosts. The separation function may also be performed before the POS device, at the POS device and/or post the POS device by an acquirer and/or 3rd party host, server or switch service and/or any other suitable separation means.
For the purposes of the Acquirer and/or other third parties paying the merchant and/or providing the Merchant with the statement in relation to all merchant transactions (rather than two separate regular payments and/or two separate statements), the normal and dynamic currency conversion transactions need to be amalgamated in some way. Accordingly, for settlement purposes vis a vis the acquirer to the merchant, and likewise the statement from the acquirer to the merchant and/or for related card scheme merchant service fee charges deducted & payable to the acquirer by the merchant, a “ghost copy” of the dynamic currency conversion transactions may be incorporated/sent to the Acquirer's or other third parties host. However, to prevent duplication of debits against the Card Holder, these “ghost copy” transactions must not be processed into the card schemes with the normal transactions. Thus the Acquirer's and/or third parties host systems have to be amended, in addition to modifications to the related accounting thereof.
This presents a significant difficulty for acquiring banks interested in using dynamic currency conversion services, as the acquiring banks have to amend their computer systems to deal with the splitting/amalgamation for the purposes of providing a statement to the merchant and payment/settlement to the merchant. To facilitate dynamic currency conversion services, a significant amount of computer code is required to be re-written on the banks' computer systems.
Accordingly, although it appears that a significant number of banks would like to offer dynamic currency conversion payment card facilities, the diversion of computer resources which are frequently scarce and in several cases must be booked years in advance makes the proposition unattractive. Furthermore, the necessity of having to interfere with existing bank computer IT systems/procedures is something that banks are extremely reluctant to risk.
This situation is to be contrasted to the position regarding the software on the payment card terminals located at the merchant locations or even at an intermediate host, where it is relatively easy to have independent resources allocated to amend the software in the payment card terminals or an intermediate host. Any changes to software in either the payment card terminals or at an intermediate host are unlikely to interfere with the operation of the acquiring bank's host computer.
Accordingly, it is an object of the present invention to provide a method to effect the performance of a converted payment card transaction, which obviates the necessity for changes to the acquiring banks' host computer system.